Medicare termination forces Kentucky hospital to cut workforce by half

Southeastern Kentucky Medical Center in Pineville was on the verge of closing when it secured a new operator on June 3. Although the hospital is under new management and has a new name, it still faces significant financial challenges.

Southeastern Kentucky Medical Center was owned and operated by the Pineville Community Hospital Association until two years ago. In 2017, the hospital association entered into an agreement with Fort Lauderdale, Fla.-based Americore Health. PCHA still owned the hospital real estate, but it entered a long-term lease deal and sold non-real estate assets to Americore.

The hospital has been on shaky financial footing in recent months, and it was in danger of closing in May. The financial troubles prompted local leaders to step in. On May 9, the Pineville City Council voted unanimously to allow Mayor Scott Madon to gather information about acquiring the licenses to operate the hospital from Americore.

Under an agreement reached June 3, the City of Pineville took over the hospital's operations and renamed the facility Pineville Community Healthcare, according to local TV station WYMT.  

Now, city officials are working to overcome the hospital's financial challenges. The hospital is bringing in little revenue because nearly all of its services have been cut, and it's no longer receiving Medicare and Medicaid funding. CMS terminated the hospital's provider agreement May 24 after a survey revealed several deficiencies related to patient care.

The loss of revenue is forcing the hospital to lay off about 60 of its 120 employees, according to WYMT.

"Without Medicare, Medicaid, we can't operate because 75 percent of our revenue is generated through Medicare and Medicaid," Mr. Madon told WYMT.

Local leaders are working to get the hospital's Medicare and Medicaid funding reinstated. If that happens, the hospital will begin rehiring employees and reopening departments that have been shut down.

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